Key facts
- Rent-tech platforms are introducing new fees or paid memberships to avoid costs associated with card payments following a ban on surcharges.
- OurProperty stopped accepting direct card payments and now routes them through Pay4it, a platform founded by its owner, charging a 1.95% service fee.
- In Victoria, OurProperty will offer 'platinum' memberships for 1.95% of monthly rent, waiving service fees for card payments.
- DEFT, a major platform, has stopped accepting debit and credit cards, directing users to BPAY, direct debit, and PayID.
- Regulators are examining whether renaming surcharges to 'membership' fees is permissible under the ban.
Online property management platforms in Australia are implementing new fees and paid "memberships" to circumvent a recent ban on credit card surcharges, effectively passing transaction costs onto tenants.
Following the Reserve Bank of Australia's October 1 ban on surcharging, rent-tech platform OurProperty announced it would no longer accept direct card payments. Instead, it is routing payments through Pay4it, a platform founded by OurProperty's owner, Russell Burstow, which charges its own 1.95% "service fee". Burstow stated that absorbing these costs would force agencies to increase rents or stop accepting cards, potentially leading to rental arrears for tenants who rely on credit cards.
In Victoria, where specific bans on rent-tech companies charging fees are in place, OurProperty will introduce a "platinum" membership on Tuesday for 1.95% of monthly rent. This membership will waive the service fees for card payments via Pay4it, while a default "silver" membership will require the real estate agency to cover fees for direct debit and automated bank transfers. Outside Victoria, direct debit and automated transfers will still incur fees.
Other platforms are adopting similar strategies. Ailo has also replaced card surcharges with paid memberships, with founder Ben White claiming overall costs will remain similar or lower. DEFT, the largest platform, has ceased accepting debit and credit cards entirely, directing its 1.2 million monthly renters to alternative payment methods like BPAY, direct debit, and PayID.
Dr. Fengfei Li, a finance lecturer at Deakin University, questioned the legality of rebranding surcharges as "membership" fees, especially if bundled with other services. She emphasized that consumers can challenge such fees and opt for available fee-free payment methods.
Tenants are encouraged to contact state regulators like NSW Fair Trading if they believe they have been misled. In one instance, a Melbourne tenant successfully challenged a 1.99% "service fee" charged by UKO, which was removed after they raised the issue with Consumer Affairs Victoria.